Study for European Parliament assesses options for turning CO2 into methanol for use in transport

25 May 2014

A report prepared by ISIS (Institute of Studies for the Integration of Systems - Italy) together with Tecnalia (Spain) for the European Parliamentary Research Service (EPRS) discusses the technological, environmental and economic barriers for producing methanol from carbon dioxide, as well as the possible uses of methanol in car transport in Europe.

The study evaluated costs and benefits from a life cycle perspective in order to compare various raw materials for producing methanol and in order to reflect the potential benefits of methanol obtained from CO2. The report concluded that benefits in the medium- and long-term can be anticipated since the obtaining of an alternative fuel using a residual greenhouse gas would allow European dependence on conventional fossil fuels to be cut, and that way the risks in supply security to be minimized.

Noting that it is “evident that considerable and sustained research efforts are necessary to turn CO2 into an efficient and competitive prime materials, which would be attractive not only for the transport sector, but also other industries,” the study proposes a series of policy options to promote the use of CO2 captured from flue gases for the production of methanol and its subsequent use in transport.

The conclusions in the form of policy options suggest possible answers on how to overcome the technological and economic difficulties presently associated to CO2 capture and conversion processes, as well as the opportunities which may arise from greater fuel variety in transport, among them methanol, and from putting recycled CO2 to use by turning it into a potentially valuable prime material.

… However, long-term trends in energy consumption for transport in Europe show that the potential for CO2 abatement and the need for greater fuel flexibility are also extremely relevant for diesel road transport and aviation, and, in terms of enhanced security of supply, for the European economy and society at large. Methanol blends, hydrogen, biofuels, electric and hybrid cars, along with different powertrain technologies could find their place into the most suitable markets as the total cost of ownerships tends to converge over time, but both policy-makers and consumers should be able to make their choices based on exhaustive and comparative well-to-wheel analysis of different fuels and technologies, which are hard to conduct with the data presently available.

—Methanol report

Issues that are particularly critical for the future competitiveness of CO2-derived methanol, according to the report, include:

The level of priority awarded in transport policy to environmental considerations—first of all CO2 abatement—and to security of supply concerns.

The uncertainty of future technology developments in the transport sector and the need to avoid stranded investments in the medium and long-term.

The need for bringing down the costs of captured CO2 and stimulating its potential uses, among them methanol production.

Improving the competitiveness of methanol fuel cells while respecting the free market rules.

Considering the need for diverse solutions for different types of transport fleets and the high likelihood of competition for fuels between all transport sectors

Market-driven approach. The market-driven approach—the “level playing field”—leaves the decision on the type of car and fuel used to the final customer. This approach, supported by the promoters of the Open Fuel Standard Act in the US, would oblige the car industry to put a substantial number of vehicles in the market, which can run on natural gas, hydrogen, biodiesel, methanol, as well as flexible fuel or plug-in electric drive vehicles, among others. While US methanol producers support this initiative, the report authors noted that there are shortcomings to this approach.

The first critical issue is since both hydrogen and methanol produced from CO2 are still far from being price-competitive, they are unlikely to gain market shares in the next decades unless there is a drastic increase in prices for gasoline and conventional diesel. Further, open standards could increase the “food or fuel” dilemma associated to the use of first generation biofuels, i.e. biocrops, and the competition for land and water resources. It is also unclear how other environmental impacts of the production and use of different fuels would be accounted for.

The second issue is enabling consumers to make informed choices.

This has considerable implications for policy making, since the numerical evidence for comparing different fuels and car performance is not presently available, as the second interim report of this study has shown. Even values given by car makers for CO2 emissions from cars and fuels already in the market have been questioned repeatedly. Getting the right values directly affects consumer purchases and calculations, as CO2 emission levels are frequently used by authorities to define the taxes to be paid by the vehicle owner.

—Methanol report

Regulatory approach.European rules for competition between different types of fuels and vehicle technologies based on a comprehensive and comparable well-to-wheel life-cycle analysis and considerations of security of supply would favor CO2 recycling, the report concluded. Such an approach would also imply embracing the idea of CO2 as an important future prime material and setting up a powerful carbon capture and utilization (CCU) industry, similar to the Chinese approach, once CO2 capture costs can be brought down to a competitive level (estimated at around 20€/t of CO2 captured) and once the environmental and energy balance of methanol production from CO2 has been considerably improved.

Advantages to this approach are the opportunity of exploring additional potential markets for captured CO2 and the chance for European technology leadership and exports. Risks associated with this strategy include the need for sustained investment in R&D and the uncertainties about the time to market of CO2-derived and competitive products.

Methanol islands. There is an interesting potential for circular economy and industrial symbiosis concepts, which could be explored in large-scale demonstration sites, the report finds. Both the IRENA experts and the methanol industry agree that under very specific circumstances, such as in Iceland with its very low electricity prices, methanol produced from CO2 is already competitive with gasoline.

Further key elements for bringing down production cost for methanol from CO2 include the use of electricity from wind farms that cannot be evacuated to the grid or employing solar electricity generated in isolated, but sun-rich regions for hydrogen and methanol production. Another key factor is proximity of the CO2 emission source to the hydrogen and methanol production sites, in order to avoid the elevated costs of transporting both types of gas.

This policy option would therefore combine smart strategies for bringing down the cost of methanol produced from CO2 with the support of market innovations requiring the use of methanol fuel cells, matching growing demand with increased supplies. The advantage of such a strategy consists in limited initial investment needs and a greater independence from developments in the transport sector, which would allow for bridging the time necessary for bringing down the costs of methanol produced from CO2 and improving the fuel cell technologies. Policy measures would have to respect free market rules, though, and implementation may therefore be complex.

—Methanol report

Scenario-driven strategies. This policy option basically implies putting a price on energy security, which can be defined by evaluating the direct and indirect macroeconomic effects of rising transport prices throughout Europe. Higher fuel prices increase the price levels of all types of goods and affect the competitiveness of export-oriented companies, as well as especially vulnerable regional economies and consumer groups.

Putting a price on energy security does, however, not invalidate the need for finding more efficient conversion processes for alternative fuels, including hydrogen and methanol, nor for promoting the most suitable uses of all types of energy sources, recycled CO2 included, so that energy remains affordable for all economic players.

We could see CO2 pipelines much like natural gas pipelines, once there is a market. You can take the CO2 from power plants, refineries and other sources to get more oil out of wells. The oil and natural gas wells become repositories until needed.

If we reuse CO2 we reduce emissions. Now we have smoke stacks AND tailpipe, with this we have tail pipes, use CO2 twice you cut emissions in half. Methanol has high octane, with no sulfur nor benzene.

Let the plants do the inefficient and expensive part of obtaining CO2 from the air. It will be more efficient and cost-effective to use the plants' waste biomass to produce hydrocarbon fuels.

There are two problems with the use of waste biomass:
1. There is not enough of waste biomass to support the level of hydrocarbon fuels that we are doing right now.
2. The biomass when pyrolyzed into bio-oil is acidic and corrosive and cannot flow in existing crude oil pipelines, nor easily stored in steel containers for transportation.
However, by adding Hydrogen during the process of pyrolysis, the resultant bio-oil will be completely reduced into hydrocarbons that is non-corrosive, to be the equivalent of crude petroleum oil, and can flow in crude oil or even natural gas pipelines into refineries for final processing.

The Hydrogen will come from solar, wind and nuclear energy, depending on the abundance of the region. Assuming solar PV or wind electricity at 4 cents/kWh raw cost is made into H2 at 80% efficiency, which will make the H2 having 5 cents' worth of energy content. A barrel of oil contains 1700 kWh of energy, so $0.05 x 1700 = $85 per energy equivalent of a barrel of oil (vs. oil now at $100/barrel). Higher temperature electrolysis will be able to produce H2 at 100% efficiency and would lower the energy cost of H2 even further.

The cost of waste biomass ranges from $1.43-2.46 per mmbtu, or 293 kWh, on page 12 of:
http://www.epa.gov/chp/documents/biomass_chp_catalog_part3.pdf
Assuming average cost of biomass is $2 USD/mmbtu or 293 kWh, then 200/293 = 0.68 cent per kWh.
By contrast, crude oil at $100/barrel would cost 5.9 cents/kWh of energy.

So, with large-scale massive investment of hydro-pyrolysis plants in rural areas, using waste biomass gathered locally to avoid transportation cost, and H2 produced from nearby wind turbines and solar PV panels, synthetic bio-crude oil can be made and flowed in existing natural gas pipelines to the main crude oil pipelines (future Keystone XL ?) and down south to the US refineries in the Gulf area, AT COST COMPETITIVE WITH THE COST OF CRUDE OIL RIGHT NOW!

The higher costs of electrolytic H2 (4-5 cents/kWh vs. crude oil at 5.88 cents/kWh) will be compensated for by the much lower cost of raw waste biomass at ~0.6 cent/kWh!!!...to arrive at a synthetic biocrude at lower cost than crude petroleum oil.

If the US defense contractors (Boeing, Lockheed-Martin, Haliburton, etc...) are tasked with the jobs of building massive infrastructureS for H2 production nearby hydro-pyrolysis plants, while the oil industry will be tasked with the production of bio-synthetic crude oil...using a part of US Defense budget, then we should be able to get these going real fast and will be able to get off petroleum in 1-2 short decades! Because the US Defense budget will pay for most of these infrastructures instead of private investments (gov. subsidy as part of the WAR ON GLOBAL WARMING), the final synthetic fuel costs for the US citizens will be less than Petroleum...and the US oil companies will be able to sell these at lower costs than petroleum and still be able to make higher profits...talking about incentives...AND A WIN-WIN-WIN SOLUTION FOR EVERYONE INVOLVES!

Whether the feedstock source is coal or biomass, a water-gas shift of the synthesis gas (H2+CO) is necessary before synthesis of the “end” fuel. You must have the optimum ratio between hydrogen and CO, i.e. ~2:1, for the syngas before synthesis to methanol or DME (slightly different ratio for other end fuels). The hydrogen content in coal and biomass is far too low to get this ratio. The water-gas shift reaction to increase the H2:CO ratio is energy consuming. By adding hydrogen (if available?), this energy loss is avoided. If we, for some reason, could produce a surplus of hydrogen, also CO2 from other sources could be utilized. In theory, hydrogen (as a motor fuel) could have a larger resource base than methanol/DME, due to the apparent lack biomass or CO2. However, in practice, they are the same, since we could always find the CO2 needed; if necessary even take it from the atmosphere. So much has been discussed about the hydrogen economy, yet methanol/DME has the same potential. In fact, with methanol/DME we also have a feedstock for the chemical industry, e.g. for producing polymers, which we cannot do with hydrogen. In a distant future with less oil and gas, available, we must not only replace motor fuels but must also substitute this feedstock for the chemical industry. In essence, the market is even bigger for methanol/DME than for hydrogen. All this, and much more, was already outlined in the book by Nobel Prize winner George Olah. He did not get the Nobel Prize for this particular discovery but perhaps he should be in line for another Prize.

In the synthesis of the “end” fuel, the highest efficiency and selectivity (minimum of by-products) could be achieved with “simple” molecules, such as methanol and DME. Fischer-Tropsch (diesel) fuel is also an option but is associated with lower efficiency. Gasoline could be produced from methanol (MTG) but this additional step is also plagued with a loss of efficiency. Logically, FTD and MTG are “drop-in” fuels that are more compatible with current fuel infrastructure and use compared to methanol and DME. It is up to future generations to decide if simplicity in fuel distribution (and use) or efficiency (=maximum GHG reduction) is of highest priority. If the latter option would receive higher priority, we should all hear more about the concept of methanol economy. In view of the storage and distribution problems associated with hydrogen, I do not see much future for this option, except for niche applications (spacecraft).

We can get from natural gas to DME at about 70% efficiency, from DME to gasoline using not much more. If we use waste heat from power plants, the efficiency goes up. Compared with tar sands to gasoline, the efficiency does not seem as important as reducing oil imports and GHG emissions.

Well, actually the new process that I was referring to is the Integrated Hydropyrolysis with Hydroconversion (IH2) that achieves gasoline and diesel range hydrocarbons in one step at very high efficiency and low cost, in comparison to the old-fashioned method of gasification and F-T synthesis that is known to be costly and inefficient.

IH2 is estimated to be able to produce gasoline and diesel fuels at under $2 USD/gallon, using waste cellulosic biomass and H2, at above 90% efficiency!
See:
http://www.osti.gov/scitech/biblio/1059031

NG is too valuable as electricity and transportation energy to use for GTL purpose of making liquid fuels.

"..can convert biomass to gasoline and diesel blending
components for less than $2.00/gallon with greater than 90% reduction in greenhouse gas emissions."

90% reduction in GHG. The efficiency could be greater than 70% using power plant waste heat. Like I have been saying for 5 years now, start with natural gas and coal at a power plant, make fuel with waste CO2, waste heat and add biomass as time goes on.

The most remarkable aspect to this report is that if enough copies are printed, the processed cellulosic components will provide high caloric heat for government offices in Brussels. Many similar reports have been produced over the years as doorstops and paperweights. Once combusted this material can be easily piped out through natural gas dedicated pipes. When joined with the biorenewable hot air emitted by elected parliamentarians, you have the means of sustaining any kind of chemical recycling process desired, within the parameters of existing technology.

This is about the dumbest idea I have seen. Yes, you can make Methanol out of CO2. It just takes energy. And where did the CO2 come from. It cam from burning something to make energy and now you use even more energy with all of the inherent inefficiencies to convert the CO2 to Methanol. If you had non-polluting energy, use it to power whatever you need to use the energy for. If you should ever have an excess of non-polluting energy (which I doubt), use it to pump water uphill.